The SEC Publishes a Guiding Framework on (Security) Tokens

Each week we share the latest news in the tokenized assets industry. This is newsletter #30 — subscribe here to get it in your inbox every Thursday.


A lot of news from the SEC this week, with the commission publishing a no-action letter and a framework for investment contract analysis of digital assets (see below).

The framework is particularly interesting, as it gives some guidance to new token issuers (in the US) as to when their token is or isn’t a security.

But as Katherine Wu shows in this detailed article, there are still many questions left unanswered; as expected from the regulator.

QUOTE

In the industry we geek out on terms like blockchain, token, DLT, ERC20, smart contract, etc. […] But those things are confusing to investors. And the new terminology is confusing to those who are tasked with protecting them. And that leads to problems for the industry that are at least partially self-inflicted due to the lexicon used.

— From this Medium article from Prime Trust CEO Scott Purcell

NEWS

🛣️ Decentralized fiat to crypto protocol Ramp Network launched the beta version of Ramp Swaps. The product currently allows UK users to swap up to £100 for crypto, in a P2P and decentralized fashion.

🏗️ Brickblock has tokenized a SPV share participation representing a €2m property in Wiesbaden, Germany.

💰 Security tokenization company Atomic Capital will provide crypto-backed loans for up to a loan-to-value (LTV) rate of 85%; much higher than its competitors, but also at higher interest rates.

🏦 Decentralized payment system Nimiq has acquired a 9.9% stake in the German WEG AG Bank. Interestingly, 30% of the bank is now owned by Nimiq, TokenPay and Litecoin: all crypto businesses.

🇺🇸 The SEC’s FinHub has published the ‘Framework for Investment Contract Analysis of Digital Assets’. The document offers a guideline as to whether/when a specific digital asset is(n’t) a security.

📃 More SEC news, with the commission publishing a no-action letter in relation to TurnKey Jet’s token offering. It specifies that the company’s tokens are not securities, provided that certain conditions (such as the tokens being “immediately usable for their intended functionality”) are met.

🇪🇺 The International Association of Trusted Blockchain Applications (INATBA) launched last Wednesday. The initiative from the European Commission (which includes Consensys, IBM, Ripple, Bitfury and many more) plans to promote regulatory and business reforms to boost adoption of DLT.

LONGER READS

💱 On the responsibilities of a marketplace (and in this case, an exchange); by dex.blue, a new Ethereum-based dex.

💵 A thorough look at Dai and why the stablecoin is on average worth not $1, but just $0.98.

NEW STOs

🌐 Veritoken, a company that aims to increase NFT-adoption, just launched its ERC-884-based STO for US-based accredited investors. Not much known about the deal, other than the company having ICO plans last year.

POSTSCRIPT

As we mentioned in our previous newsletter, CryptoValley Summit 2019 was held in Zug, Switzerland two weeks ago.

The organization has published a video covering a large part (6.5 hours) of the day. After the …interesting music video intro, it features some good speeches and panels on Cardano, crypto banking, STOs (from 2:20:30), real estate tokenization, and more.

See you next week! 👋

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SecurityToken.it is created by Infloat. At Infloat, we actively explore the applications and potential benefits of tokenized assets.